As if bad credit scores and rising debts were not enough, car insurance rates have hit many Americans hard because of the economic recession.
A recent market research revealed some changes in the behavior of most consumers looking to renew their car insurance.
According to the study, less and less drivers are sticking with their existing auto insurance companies compared to previous years. Only 23 percent of American motorists have decided to stay with their car insurance providers. Eight years ago, the figure was much higher at 31 percent.
A whopping 77 percent or more than three-quarters of consumers now shop around before deciding on a company of their choice. Of these, 45 percent have taken up to three different quotes. Some 16 percent have even taken seven or more quotes. The findings also reveal that most of the drivers that shop around are aged 34 under.
More mature drivers have chosen to stick with the same insurance providers. A third of drivers over 55 have decided to retain their policy with the same insurance companies for over half a decade.
Industry experts say that brand loyalty is fast becoming a thing of the past because of the intense economic recession that is making consumers think twice before renewing their policies. They also point out that Americans are becoming more mature in their choices and are more price-sensitive than ever before.
Almost half or 49 percent of drivers purchase their policies directly from insurance firms while two-fifths or 20 percent employ the services of a comparison website or a broker.
However, more and more people prefer websites over brokers since the number of comparison websites, known as aggregators, has grown. These websites allow consumers to directly compare the features and products of many insurance providers before deciding which one to choose.
Analysts say that the relatively quick process of acquiring auto insurance quotes from aggregator sites has encouraged more drivers to use them instead of approaching brokers. In just 30 or 60 minutes, motorists can compare and select the provider of their choice.
They also warn that consumers should be wary of the coverage they purchase as they switch from provider to provider. Cheaper prices may not necessarily mean best value for money, they point out.
Drivers could end up losing more if they choose the wrong insurance coverage whereas drivers know their coverage work if they stick with the same companies.